Yahoo revamps email in bid to catch up with Gmail

Alexei Oreskovic

Yahoo has rolled out new versions of its popular web email, the first major product makeover since chief executive Marissa Mayer took the helm of the struggling internet company five months ago.

Yahoo released new versions of its Yahoo Mail app for smartphones and tablets — in keeping with Mayer's focus on mobile devices — and a revamped version of its web-based mail product for computers that cuts out ancillary features and that the company said delivers faster performance.

"You've told us loud and clear that you want fewer distractions when it comes to email. You want to quickly login, communicate, and get on with your day," Mayer said in a post on Yahoo's official blog.

Yahoo is the number one web email product in the US and number three worldwide, behind Google's Gmail and Microsoft's Hotmail, according to comScore.

But the number of unique users of Yahoo email declined 16 per cent in November from a year earlier in the US and 7 per cent worldwide in October, according to comScore. Gmail's unique users increased 25 per cent in the US in November and 20 per cent worldwide in October.

Analysts say Yahoo's email decline also owes partly to the broader trend of younger internet users who prefer to communicate with text messages rather than email.

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Mayer, 37, is moving to revitalise Yahoo's various web products and reverse years of declining revenue. A former Google executive, Mayer is widely admired in Silicon Valley for her web product savvy, though some analysts and investors have expressed caution, noting that Mayer has never before led an entire company as CEO.

She has said her top priority is to create a coherent mobile strategy for Yahoo and that she intends for at least half of the company's technical workforce to be working on mobile products.

As part of the announcement, Yahoo unveiled an update to its mobile email app for smartphones based on the Android operating system, as well as Yahoo's first stand-alone app for Apple's iPhone.

Yahoo also released a version designed for tablets and PCs based on Microsoft's new Windows 8 operating system.

Vivek Sharma, General Manager of Yahoo Mail & Messenger, said the group of new mobile apps was part of Yahoo's goal of ensuring that its products are available across all major mobile platforms — a move that he said should help Yahoo's email stay popular with the younger generation of users.

"Most of the new users, especially young ones, are using mobile internet devices. So the first order of things is to make sure there are native experiences for them," said Sharma referring to mobile apps that are specially designed for smartphones.

Fewer ads

The new PC version of Yahoo Mail features fewer ads, primarily by doing away with pass-through web pages that users previously encountered before they could access their inbox and which appeared after a user sent an email.

Eliminating those pages and improvements to the way Yahoo displays its email web pages means that users can now reach their inboxes 40 per cent faster, Sharma said.

Yahoo's email product is an important piece of Yahoo's overall online business, serving as a conduit to bring in users which Yahoo then tries to redirect to its other websites, such as news articles, stock quotes, games and videos.

By simplifying the product's look, Yahoo could increase the amount of time that users spend visiting its online properties, said RBC Capital Markets analyst Andre Sequin.

"A website can be incredibly useful, but if a user interface is annoying or has too many flashing ads, it can drive a person away," he said.

He compared Yahoo's email revamp to one of the key accomplishments that Mayer is credited with at Google: the sparse homepage, which is free of ads and prominently features a search engine box surrounded by white space.

"Improve the experience on mail and there's a good chance you can get people to stay engaged with Yahoo properties for a long time," said Sequin.

Yahoo ranks among the world's most popular websites, with roughly 700 million monthly visitors. But revenue has eroded due to competition from Google and Facebook and changes in the online advertising market that have compressed prices for the online display ads that are key to Yahoo's business.

Many analysts and tech-industry observers say Yahoo's online products have failed to keep up with rivals when it comes to integrating innovative mobile and social media features.